As reported by Business Insider on Saturday, the Labor Department’s newly-released statistics reveal that “the number of discouraged workers … hit a record high (since 1994, the earliest year the data is available) of just over 1.3 million … .” The numbers show that, contrary to the myth of the unmotivated unemployed living off of the public dole, people without jobs want to work but are hopelessly unsuccessful in their attempts to locate gainful employment among the fabled “new jobs” created by the state.
The data, whether we fully give credence to their accuracy or not, expose a condition of earnest competition among workers for comparatively very few job opportunities. The inexorable result of these conditions is a low cost for high quality labor, with the employers in the game able to take their pick among droves of applicants. But if all of these Americans really want to work, then why can’t they? Why are there so miserably few outlets for their skills and why is their potential being wasted?
In his new study, The Great Domain of Cost-Plus: The Waste Production Economy, Kevin Carson answers those questions, showing that “the propertied and employing classes have resorted to all sorts of artificial property rights and artificial scarcities to control producers’ access to land and capital.” In doing so, the powerful winners in the state’s patronage economy are allowed to steal the wealth created by the producers and prevent them from living and working on their own terms.
Orwell’s Nineteen Eighty-Four similarly recognized this “problem of what to do with the surplus of consumption goods [that] has been latent in industrial society,” a “problem” that — of course — isn’t one at all. As both Carson and Orwell understand, leisure and self-direction for the worker are only problems for those who want to use what Orwell calls “artificial processes of destruction” to force some people to go to work to make other people rich. And that’s the state’s game, making sure that free society never realizes the plentiful tapestry of options that would mean an end to the disconnect between work and wealth.
What the state has essentially done is limit the number (and thereby the “supply”) of employers, creating a Big Business-dominated economy and controlling access to a given market to such a degree as to shackle the choices of labor within certain mandated parameters. Rothbard identified this process, the preclusion of wide open competition, as “confer[ring] a monopolistic privilege, and therefore a restrictionist price.”
Libertarians have traditionally understood and devoted particular attention to the effects of this kind of monopolization on the services customarily provided by governments. Notwithstanding that attention, though, the pervasiveness of “restrictionist” pricing in the broader economic system — particularly on labor — has been if not completely ignored then largely under-appreciated.
When workers have only the “choice” of working for Acme Corp. or MegaCo, LLC, and can’t (due to the regulatory environment) go to work for themselves or for a small co-op, their leverage is functionally removed from the bargaining process. Inasmuch as walking away from negotiations means starvation, what they’re left with is whatever scrap capital wants to toss their way, which in practice means a manufactured devaluation of work.
This operation is “the unrequited appropriation of the labor of others” that Franz Oppenheimer “called the ‘political means,’” and it’s a feature of corporate capitalism, though not of the free market’s approach of voluntary trade. Since there’s no real recourse from the unnecessarily-limited employment possibilities, the state and its advantaged friends have the rest of us over a barrel.
Fortunately, because of technology and its “network culture,” there are all sorts of new and constantly-developing ways for people who want to trade to link up and circumvent the state’s repression. If you’re looking for someone to blame for the present condition of the U.S. economy, look no further than the state and the corporate First Class. As the financial meltdown hopefully demonstrated, it’s time to stop assigning the elite’s mistakes to the luckless poor who pay their costs in sweat.
Citations to this article:
- David D'Amato, No Work for the Weary, Urban Tulsa Weekly, 01/26/11
- David D'Amato, No work for the weary, Deming, New Mexico Headlight, 01/19/11
- David D'Amato, America’s discouraged workers: No work for the weary, The Canadian, 01/11/11
… and so on. That analysis is broadly accurate, but it relates more to ultimate causes than to the mechanics of what is actually taking place. In particular, that second sentence is incomplete and therefore wrong; it is missing out what happens to people who are kept out of work for themselves or for others, who are thus kept from creating any wealth – their wealth isn’t being stolen, directly and as such, as they don’t have or make any, but rather they are kept sidelined so as to create that imbalance of opportunity, and it is only their opportunities that are being stolen (though “so as to create” might be wrong as it suggests deliberate intent, and “in a manner that creates” would fit better if the manipulators are aiming at manufacturing artificial opportunities with the unemployed merely an ignored side effect). One thing even worse than the plight of “the luckless poor who pay their costs in sweat” is the plight of the luckless poor who don’t.
These mechanics themselves, i.e. the proximate causes of the problems, have to do with an externality cost created by having the marginalised around; in other times or places that externality cost shows up as Vagrancy Costs, that create a spread cost of policing and jailing people or even shooting street kids, and in more humane societies like Australia it shows up as the spread cost on the tax/revenue base of funding support for the unemployed, an externality cost that doesn’t sheet home to individual employers making hire and fire decisions (the USA is part way between the two). In our current situation, this is the proximate cause of much unemployment and the poor bargaining positions of workers and would be workers.
Of course, short of hitting Malthusian constraints (which make a physical limit) this would be a non-issue if people had had their own resources all along, as this article and its sources imply. But that does not mean that simply bringing that about would be a straightforward fix, both because doing that would present transition costs in the form of time, trouble, etc., and because people would have to make their own personal transitions to be able to avail themselves of the resources; at the very least they would have a skills mismatch, just as the first Australian transportees had when faced with growing their own food. So I and others have independently researched a fast acting, first step towards undoing the Vagrancy Costs externality in a Pigovian way (though I cannot speak for whether the others have looked at it from this perspective, or if they think of it as I do, as ideally only the first step in a transition that would end with self-sustaining, independent self sufficiency much like Distributism).
This first step is the tax break/wage subsidy approach described by Professor Kim Swales of the University of Strathclyde and his colleagues (in the UK), and by Nobel winner Professor Edmund S. Phelps, McVickar Professor of Political Economy at Columbia University (in the USA). I myself have done a game theoretic analysis of aspects of these proposals (in Australia – see this and following, or my Henry Tax Review submission; bear in mind that the money numbers in the older material are over ten years old, and should be 30% to 50% larger now – but you no longer have to convert between US$ and $A as they are now practically at parity).